Universal Basic Income- The Craziest of all Ideas,  Which May Actually Work?

Universal Basic Income invokes shock and horror amongst the conservative chattering classes and skilled labour alike. Paying people to do “nothing”, it is crazy and lazy! Or is it? When billionaires, libertarian leaders and astute politicians start promoting the idea, then we have to inform ourselves!

From Luddites to Blairites

Society is changing in the way it relates to economic activity. This sea-change of new technology replacing human tasks,  is allegedly going to accelerate beyond the rate at which new human based jobs and livelihoods will be created. We are about to robotise menial and manual jobs such as shop service and public service /freight driving, while also  on the more skilled end of human mental activity,  let algorythms do the work of highly skilled accountants, scientists and even lawyers.

The great advance in computing is here, we can finally emulate the human brain in many activities, and in some, like motorway driving, outperform humans.

When transport workers and accountants get their redundancy notices, will there be a great cry of  ‘ crush the machines’ as the Luddites of the first industrial revolution demanded?

Will there be rather a slower transition, as the relatively expensive technology is rolled out in the larger firms first? Or will this be a rapid transition aided by the departure of the old school baby boomer management structures, who are largely reaching retirement age and taking their philosophies with them into senility (?).

Blairite- Wallmart economics – the UBI is already here anyway, yet complex and expensive to adminsiter ? ……………………………………………………………………..

Industrial Revolutions Revolve The Work Force

Why should this new industrial revolution reduce the number of workers when all other industrial revolutions and major innovations  have actually lead to new wealth-creation and more jobs ?

In truth some jobs and professions have died away – take the 1960s typing pool- a hand written letter or shorhand dictat was taken to the ( girls) of the typing pool and returned to the originator often some days later. These typing pool employees needed to read,  spell and type at 40 to 60 words a minute. They were whiped out within a ten year period, and even secretaries were removed from middle to upper management, just the reserve of VPs and the CEO. A cultural shift occured in the 1980s. The PC, spellchecker and there after the e-mail killed off these jobs.

The thing is that in that case women were emancipating themselves, and these menial jobs were no real loss to them. Computing also lead to new opportunities in data capture (punching in) and customer or supplier interaction. There were new needs for manual interpretation and interaction with databases and communication systems.  They were getting educated, trained and advancing their own careers. There was a counter current which neutralised much of the change.

I was sayinhg to a friend just today, when we were young would be ever believe that two small start up companies foom the 1970 Apple and Microsoft would be bigger than GE, GM and the tourist infustry? Or that a social platform, a replacement for mail and telephone, would become the highest value company listed on the NY stock exchange?

So we also see then possibilities here for this kind of redirection. Also that human activity in a technological society tends towards higher value per person- both monetary and by value to society.

The reason that previous industrial revolutions driven by technology have lead to growth in standard of living and wealth is that on the one hand there are new tools delivered, while on the other there are new opportunies in the end product or service. With new tools we increase worker productivity, enhance often quality and reliability in the product, and enable new possibilities, often not envisaged when the new tool or process was first developed.

So for example the steam engine lead to the internal combustion engine, while the combination of the steam turbine and the turbo charger lead to the jet engine, which in its’ end applicaton shrunk the world for us.

This ‘revolution’ is not the first time we have seen a quantum leap which displaces human labour. It is ironic yet illustrative that the terms ‘calculator’ and ‘computer’ both were used to describe professions in the 19 th Century. These tasks were done wholly by people. As tools, they allow us all access to accounting, engineering, drawing, image manipulatiin and communication. Yes they seem to just replace manual tasks, but they allow more people to access the skills and utilise the mathematics and technology.

Robots take over an entire human in a similar way as mechanical and then electronic calculators did. They displace a human from a menial task, or enhance the precision and repeatability of a skilled job. However the latter leads to even larger efficiency gains.ibduastrial welding and operational Robot and electronic guided machine tool manufacture became a major industry, and programming and maintaining them the new skill on the ground, while the companies engaging them could grow and offer higher value in the market. Which meant people could do new things, better things and often quality became more affordable.

Many highly informed pundits though, forsee a near future where millions of people will be economically displaced. In the USA they say that 3 million driving jobs will disappear. But in what time span? Do we need a UBI to smooth the transition and pick up those older or less literate workers who have difficulty in new professions? or does it happen slowly and natural wasteage  (retirement and career exits) balances the disruptor ?

Lowering Barriers to Micro Industrialisation?

There is another barrier which is being overcome here with the super robot and algorythmic decision maker. The barrier to entry for new competitors.

These new ‘super’ robots are going to be affordable in aqusition and service- that is the reason many pundits think  adoption is going to be so wide scale and hence displace so many human jobs. So although they add costs they take away human costs, and are in theory more productive than a single human.

Now if you imagine a robot or computing system able to do the job of ten people, yet the cost per unit is less than a single year for an employee, then small businesses can compete with bigger businesses in producting niche products or innovations in local markets.   SME’s can be close to their local customer or ‘pyscically proximal’ global customers. That is to say they can react rapidly to evolving needs and tailor products and services to that niche, or deliver a local product quickly. SME can offer that high degree of tailoring to customer, while also offering higher quality or perhaps even a cheaper version of a product than the main stream ‘value added’ offering.

We see this to some extent with the somewhat over hyped 3/D printing technologies. It can mean that a very cheap, local product can be made, or that a very high quality product can be made with high precision. New products not envisaged can be rapidly prototyped and come to the world as solid entities. Furthermore new service opportiunities, remembering the jet engine, can be rapidly created, tailored and disseminated. This means that new entrepreneurial activity is enabled with a focus on creativity and solving problems, two things humans still by in large out rank the CPU many fold.

What About the Trailer Park? 

On the other hand then, what jobs are left for the unskilled, non-entrpreneurial section of society? Already they are economically margunalised and often as active in the black economy than the taxed one. They wont be designing, fixing or reprogramming the robots which habe taken their joibs. Is the new robot and algorythm technology going to be too large a crash across too large a section of the economy, jobs market and social strata that we  will create destitution en masse fro, what is called the Precariat today – the precarious proletariat?  Will social-mobility halt up as young adults can no longer work their way into and through college and university?

 Ellon Musk and Mark Zuckenberg certainly do believe that we are on  the brink of a sea change which is inevitable,  but which will make human economic activity redundant in so many sectors and professions such that society will be profoundly disrupted by inequality and abject poverty. 

Further market mechanism critique tbc lost in draft crash DO NOT RESTORE next time

Also a new bit on the ‘hipster and home sale begging’  future, which is already here. Offering high price on products which are only of slight better quality, “begging” from friends and relying on trainsient styles and fashions.

 Where are the Social Democratic and Socialist Left on UBI ?

From the traditional left wing perspective, UBI is admitting defeat to market mechanisms over promoting living wages and engaging more of the workforce in useful jobs which better society.It is a simple sticking plaster over the ills of capitalism.

In effect we came to this capitulation in the UK with the Blairites and Gordon Brown’s policies of making work pay, a form of gauranteed minimum income with flexibility for working part-time, mediated via benefits and tax credits. This was a major economic blunder in light of allowing weak labour laws to continue from the Thatcher era, permittting a culture of the lowest common denominator in employment , the zero hours contract, and the precarious temporary nature of working in the consumer service sector in particular.  In turn these policies have reduced tax revenues from ordinary unskilled and semi skilled workers  while increasing benefit payments in the periods they find their temporary contracts end, or their hours cut. Even average income workers with families can find they recieve more in tax credits and benefits than they pay in income tax in the UK.

The hope as with all political policy, was that economic growth would eventurally take more of these people out of benefits and make them into net tax payers, an essential element in any modern economy with an ageing population.  The means of promoting economic growth are Neo Liberal, promoting flexibility in the labour market and deregulation. This is the biggest critique of the decade of Labour Blairite power- that they gave up fighting for workers rights, bar the minimum wage, and caved into the concepts which would eventually lower the standard of living for many of their own voters, plunging them into the part time/ temporary economy.

Even in the USA there is a form for UBI for part time workers which keeps Walmart supplied with cheap, disposable staff, and they can avoid all the ‘on costs’ associated to full time, permanent staff such as pensions or health care contributions. They found the lowest common denominator and kept policy in place via lobbying such that public money still supported their profits, while social un rest due to abject poverty were kept at bay due to welfare top ups and medicare for the poorest.

Neo-Liberals. The Weirdest Proponents of UBI

Neo Liberalism has some common sense in its often otherwise twisted philosophy. That of the existential individual. Really the modern labour movements and neo-socialists do not have much of the collectivist policy left when it comes to outdated concepts like the command economy. Here the two actually meet , full circle if you like, the extreme ends finally tieing in a bizarre consensus on UBI.

Neo Liberalists knew all along that they would need to have welfare in western economies in practice, because capitalism is inevitably a ‘trickle up’ affair which leads to social unrest. Policy makers under reagan and bush administrations made high profile cuts to social budgets, while in fact the budget for welfare increased and more employers started to use staff on a part time/ temporary basis. But in turn they have woken up in their key national economies, the US and the UK, to the huge structure in place to keep people sruviving – the “precariat” , the precarious position of the proletariat. The means of delivering and policing social welfare are hugely costly and labour intensive.

Also on the libertarian side, there is the element of personal freedom being constricted by government schemes which have rules and boundaries as to what economic or educational activities claimants can or cannot engage in before they lose their benefits or  have to apply for other types of benefit.  For willing participants, it is argued that it renders them under the wing of the nanny state, with an expectation that the government scheme will fix things for them. They will get personal improvement via the governments’ action, via the beaurocracy.

Here then UBI has ‘small government’ appeal to Libertarians

On the liberal, neo-socialist side, we have then support for a basic standard of living, and as mentioned for the Blairite position, a capitulation to the way the market has evolved. A light administered ‘living wage’ which would cover an elementary costs of survival without means testing, just via computer based tax and registration comparisons, has great appeal because on the one hand it feeds people, while on the other it denies employers access to what is tantamount to slave labour- there is no compulsion from government to take work and live precariously, in and out of those expensive welfare systems.

From the ‘socialist side’ UBI delivered via efficient computing systems can be viewed as the final step to liberating the workforce from slavery. This being in that jobs are no longer viable when they barely cover subsistance, from low pay to zero hours contracts,  and ‘maggies farm’ economics where by employment hot spots reduce wages to the same for skilled workers. Capital then has to develop more attractive packages for workers and allow them to work home office for example.

Social services ….

Cold Turkey for Welfare ?

Many arch neo liberalists and conservatives advocate the removal or all state welfare, for much the same reasons UBI is arguably flawed. Yet we have the reality here,not a possibility, that zero welfare leads to social unrest. Violence, crime, malnutrition, mafiaosa and emmigration. That is what happened before in history, and there is no difference today. There are no great charitable mechanisms, no mass food bank. There are guns, there are terrorist recruiters

Who then decides if you qualify for UBI? At what stage to you have to exit UBI or is there a transition, as a gauranteed minimum income which would potentially be more beaurocraticto administer. Do many actively choose to be UBI or is it something you have thrust upon you by default or culture? There is this element in the concept that it is a kind of default dialogue, that you would normally be unemployed or disabled or that your line of work makes you ill. Who says then you cannot qualify for UBI?

UBI is easier to administer than current systems because it is a simple payment. Opportunity for fraud are of course there, but with a stricter capture of identity electronically then it can be mediated automatically without any human staff. It is linked to income tax and declarations of sickness or unemployment, which can be fed into the system automatically. A field day for criminals? Well attempting to register a false identity becomes a bigger crime than it is today, as does identity theft.  police time is freed from petty crime conducted by subsistance marginalised peoples in order to feed or entertain themselves, to catching organised criminals and violent gangs.

Picking up on the last points from previous section then we see that a minimum gauranteed income would reduce beaurocracy and increase personal freedom. However what are the down sides of injecting this money at the lower end of the unskilled and semi skilled workforce ?

 

Lost draf critique of Neo Liberalism lord in the castle feudalism, barricaded utopia, bread line, violent social unrest and revolution

Economic Criticisms of UBI

The main argument against UBI from main stream centre right economists is that it renders people lazy. There is no compulsion to work for the basics of life, so many millions will choose this route and become state dependents. However this position is a fact of life in the two major Neo Liberal economies, the US and the UK already. Otherwise there would be social unrest when large numbers of people cannot put bread on their table and cover the cost of their rents.

There is a cultural counter agrument to conservative thinking of the ‘lazy bones society’- people want more than their basic subsistance, and strive for more. If you take away striving for basic survival then you find the large majority strive for more. It was always the intention of Blairite Brownite top up benefits to let people get more work experience and take up work, with the hope that many would be locked into the pay economy and not the benefits economy. This was not the case in reality over th elast two decades, as employers could reduce their costs by removing down time via zero hours contracts and seasonal employment, while still maintaining a willing (or often compelled) work force at this low cost.

Conservatives would then argue that this has to be paid for by taxes. Yes that is obvious. However how much does western society pay now and how inefficient are the state mechanisms for administering this? Proponents  also point to the drop in crime and the improvement to health because the poorest can come out of malnutirtion, those suffering back problems or stress from office jobs can choose a new lifestyle, prople can choose more time for sport and exercise.

It seems very utopian, unrealistic. Surely it would be overly tempting to turn on, tune in and sign up? The question the leaders of the new technological industries pose, is what are we going to do with all the people who do not have the ever higher level of skill and education required to run their businesses and utilise or service their technology?  Is the alternative not dystopian, where human life and effort is not valued in terms of say 20 / 30% of the working popuilation?

 

The Libertarian Rentier Economy Is the Reason UBI Could Fail

UBI also applies to handicapped people and when you are sick. So it sounds like a win win all round. Back up here though, we are like the Affordable Care Act, injecting large amounts of money into the economic system.

Here we come to the doyen concept of Neo Liberalism, the unfettered predominance and power of the rentier economy. The natural law for the powerful, the rich to extract more from our very existences rather than our productive output. Our housing, our transport, our water, our power, our basic staples and basic shopping. Trickle up, and when it concerns housing, often a torrent.

With no social housing policy or rent controls, UBI is an irresistable inflationary surge. In fact the rentiers themselves may libby for UBI as a means to flow more value in rent and asset worth up to them, in the way Walmart support welfare ‘rights’. Also it could lead to a new credit bubble if individuals lever their new secure income against consumer credit.
UBI becomes then self defeating it would seem, as its value is inevitably erroded by inflation, with no counter acting productivity gains?

Also would we see the spread of ‘internships’ where to gain skills ornexperience it is expected that you live on UBI?  Would we see a further displacement of labour in other sectors due to the availability of bored UBI’ers ? Would we see more work become part time and tenuous as employers learn to use those on UBI ?

 

more on the basics are covered and game theory

Market mechanistic theory would however also produce counter arguments to the erosion of the value of a UBI by inflation. Because a UBI is not tied to living in one place. Suddenly people in high rent areas can move to lower priced areas which they can afford. They also have time to build their own housing, and gain training to do so. People in work struggeling to make ends meett can vote with their feet and opt of UBI, reducing their income, but then also moving away from the over priced metropolitan and sunrise valley areas. So there are different countering market mechanisms to the possibilty for run away inflation. It gives a kind of ultimatum to capital – make employment pay or we will leave employment. Make jobs interesting and fulfilling or we will fulfill ourselves and find new economic activity from a base line of UBI.

Existentialism to the Rescue of UBI ?

To counter the inflation-anullation argument against UBI, we can see that people are no longer trapped in using their time to simply survive. They become more mobile. If rents go up in one area,they need not worry about moving to a cheap non metropolitan area. Or they may use their time to buildn their own house, and even lobby, organise and build housing in their communities. Free from beaurocratic demands to take low value work, they can take education and work practice in skilled trades while still feeding and housing themselves.

Today in most all western societies a black and white model of work and welfare has developed. You are either in work and trying to make ends meet, sometimes forced to accept what you can, or you are out of work on benefits.You are not allowed to keep benefits and work as you choose or as it becomes available.  Gordon Brown’s ‘make work always pay’ hss lead to more margjnalisation not less, it has locked millions into precarious personal economics and state dependency.

Here we also can consider what is happening with Face Book’s income and more specifically where it is coming from. By in large the corporates have not been hugely active on FB compared to Google and TV. When was the last time you saw a Coca Cola Advert on FB? Or had a ‘push post’ from General Electric without you Liking their profile?  Facebook have related to the media that much of their 8 billion dollar advertising spend comes from small enterprises. To them FB is cheap, less than ten dollars per thousand or more reach to views, and less than 20 dollars per conversion to sale,  or  per new  potentially loyal customer. The business is granular and below the radar of ‘anti corporate’ negaitve sentiment. If Fb are being candid, then we are not being spammed by the grey suits, we are being wooed by hipsters and spinster start ups on our FB newsfeeds.

 

Individual bargaining….lost in draft fail crash. Black mail, pay to play. game theory

 

Futurology on robots making robots automation removing capital control, excessive gross marhing for staff and profit removed,  Utopia behind the barricades

 

We have nboth utopian and dystopian visions, but the facts are in front of uis. Major western economies already have mechanisms of UBI for marginal workforce, disabled and chronically sick. Robotisation is going to replace thousands of unskilled/semiskilled and automation of more cranial operator tasks with software utilsing algorythms

Workfare policies becoming the norm for UBI and really getting back to slavery. Libertarian ppiint of view that it is then the govern,ment who are directing what people do at work, or perhaps employers as mentioned take up UBI instead of ordinary employees at minimal cost with an element of compulsion, and a lose lose for government tax returns as tax paying employees are displaced.

Market mechnisms or government could be replaced:  cost per service affordable vs tax and inefficient  or the need for major service management neo liberal compulsory compet tendering removed and competiton being for the mechatronics, the computer systems, which eventually enter dminishing returns

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